Weekend Reading: Labour Day Edition

Ever since the NDP gained power in Alberta, my Facebook newsfeed has been filled with strong opinions from my right-leaning friends about the provincial government’s “disastrous” decision to increase minimum wage to $15/hour. Now, with the federal election looming, raising the minimum wage has become part of the national conversation.

One post showed a picture of McDonald’s new touch screen cashier in St. Albert, saying this was the corporation’s direct response to rising labour costs. (In truth, this type of automation was coming, regardless of political interference).

The most popular argument is that raising minimum wage will put increased pressure on restaurant and bar owners, causing them to reduce operating hours or even close altogether. This New Brunswick restaurant owner called it financial suicide, saying there is no way he could raise prices by 40 percent to compensate for the increase in labour costs.

Here’s a crazy thought that could help business owners and customers alike manage a hefty increase to minimum wage – we should abolish tipping.

Think about it; restaurant owners who claim that passing along increased labour costs to their customers will cripple their business have had no problem presenting the same customers with suggested tipping options of 18-25 percent. The point being; customers are already used to subsidizing service industry wages through increasingly higher tipping “standards”.

Weekend Reading:

Bridget Casey dug up her ugly financial past when she decided to shred old documents from 2008. Like Bridget, I’ve also held onto my congratulatory letter from when I paid off my student loans in full.

Finally, this article in the Report on Business argues that although jerks can be unpleasant to be around, they get things done. One reason why I gave up trying to become top dog in the hotel industry was that I didn’t have the stomach (or maybe enough “jerk” qualities) to make tough decisions that impact the lives of my employees. Having to fire someone made me physically ill. Giving a negative performance review wasn’t any better. I’m much happier being a team player and manager of one (me).

14 Comments

Tom
on September 5, 2015 at 11:44 am

Love your opinion on tipping! I have felt the same way for years! The friends I have that are servers call me a “jerk” and such for my view. Because while I do tip, I don’t do it based on service (are you even supposed to do that?), but rather to provide the server with a reasonable wage. Would have no problem if restruants were 30% or whatever more expensive on the menu, but I didn’t have to tip. The worst is NOT tipping (even if it’s terrible service), because at a lot of places, then the server pays out of their pocket for your meal (with tip-out to the kitchen/host).

In regards to your Ratehub article – we’ve been paying our “contractors” (read: handymen found online) with PayPal probably 90% of the time since buying our home. It’s great for me, because PayPal covers the transactions (in case the work is extreamly poor) and I can then pay with my credit card. The “contractors” are usually convinced into it by reminding them it’s in their bank in only a few days, and eliminates the risk of a bounced cheque. (Although, most of them are fine with it after I simply say I want the credit card rewards).

With barely any disposable income left after taxman takes a big bite along with mortgage, that leaves with little to nothing in average Canadian’s pocket. Average middle class wont eat outside with rising cost of foods at fast food chains. It is anyways unhealthy. I personally brown bag my lunch. We go out for a weekend lunch once or may be twice a month.

Actually tipping thoroughly entrenched in most ‘developed’ countries to the point that it is a line item on the bill (i.e. most of Europe). Only exception I can recall is Australia and New Zealand but tipping is creeping in there.

It’s the undeveloped countries where tipping is not the norm.

The only problem I can see with a no tipping + increased wage scenario is that the already dreadful service we experience in Canada will get even worse in that the staff has no incentive.

I spend a lot of time in Europe. Not only is tipping not expected, it tends to be considered a bit insulting.
However, you really only ask yourself if you would like to be paid in your job based on alms from customers, or if you work so much more poorly because you are not tipped.

There is much more to this issue than restaurant servers. I have a small professional office where I employee 3 other people. The first one performs front desk and junior professional duties. This person has a high school diploma and a good amount of experience. Pay rate is $16.00/hour. Minimum wage takes a big jump and therefore I need to bump the pay up a bit.
The next person is a full junior professional staff person and I pay them $19.00 / hour. The last person got a big increase and to keep the scale I need to bump this one up as well.
And on it goes…..
The bottom line is, if you don’t want a minimum wage job, then improve your skills and get out of that job. Nobody owes you anything, get out and earn it.

Hi Brian, thanks for your comment. I worked in the hospitality industry when Alberta moved minimum wage from $5.90 to $8.00. It was a lot of work, not only moving up the base rate of pay but also creating an entire matrix grid for the rest of the hourly employees who would be affected by the increase (moving up the scale, as you say).

It was messy but we got through it. The problem with your last statement is that if it were left up to corporations we might still be paying $5.90/hour at the entry level. In my experience, we always made annual merit and cost of living adjustments for our existing employees, but never adjusted the starting point or minimum wage for new entry level employees (unless mandated by gov’t).